What is Keynesian economics?
Q: What is Keynesian economics?
A: Keynesian economics is a set of economic theories developed by John Maynard Keynes and outlined in his book The General Theory of Employment, Interest and Money. It describes how capitalism works and suggests that the government should step in to help people who do not have work during times of economic downturns.
Q: What did Keynes say about capitalism?
A: Keynes said that capitalism is a good economic system where people earn money from their work and businesses employ and pay people to work.
Q: What do conservatives, libertarians, and Austrian economists think about Keynesian economics?
A: Conservatives, libertarians, and those who believe in Austrian economics disagree with the ideas presented in Keynesian economics because they believe that the economy can get better without government intervention. They also argue that when the government borrows money it takes away from businesses.
Q: Why was Keynesian economics less popular during the late 1970s?
A: During the late 1970s, many interpreted Keynes' theory as saying it was impossible for there to be both high inflation and high unemployment at the same time. As a result, this caused some to become skeptical of its effectiveness which led to it becoming less popular.
Q: When did Keynesian economics become more popular again?
A: After a big recession happened in 2007, leaders around the world (including Barack Obama) created stimulus packages which allowed their governments to spend money on creating jobs. This helped bring back popularity for Keynesian economics.
Q: How does a stimulus package reward bad behavior according to conservatives and libertarians?
A: According to conservatives and libertarians, when governments create stimulus packages it rewards bad behavior that lead up to recessions because it tells big banks they can misbehave without consequence since the government will step in if needed.
